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How to Drive ROI with Telecom Expense Management

With the current economic recession, most companies are feeling the pinch and actively looking for ways to cut costs. On the IT side, CIOs and senior telecom executives are under extreme pressure to make the right spending decisions for their technology infrastructure while dealing with budget cuts. Faced with growing demands in wireless services and the high-ticket costs of telecommunications, Knowledge Center contributor John Shea explains why an increasing number of companies are looking at Telecom Expense Management as the answer.

We've all heard the statistics that telecom is a large chunk of the IT budget, typically one of the top five expenses, and it's not being actively managed. So what does this really mean for corporations and government agencies? Well, it really equates to millions of dollars in wasted spend for the average Fortune 1000 company. That's money that could have been used to strengthen a company's financial position, save jobs, improve services or fund desperately needed IT projects.

Telecom Expense Management (TEM) is an often overlooked practice, but its cost-saving benefits cannot be ignored. It provides a way to track your telecom inventory, facilitate orders, monitor spend, and automate invoice processing as well as auditing. To help you get started, here are five ways TEM can help your company save on telecom costs in a down economy.

No. 1: Get a handle on wireless expenses

Wireless spend has exploded in the past few years. BlackBerry devices and cell phones for corporate use are ubiquitous, but along with these advances come a management nightmare. Security concerns over sensitive data on devices, overage charges, text messaging charges and device procurement all become a very real issue. This is also an area that most companies mismanage.

Further reading

For example, a Fortune 500 travel provider recently conducted a wireless audit across their organization. They discovered expenditures of over $40,000 per month on text messaging charges alone. Their employees were sending and receiving text messages without any type of plan in place, and each text was incurring a 10-cent to 30-cent charge. This company is looking at saving over $1.5 million a year in wireless expenses alone.

Another area of high cost is the overuse of 411 (directory assistance) on wireless devices where the charges are typically $2 to $3 per call. Communicate these costs to the employees and encourage or mandate the use of free 411 services such as Google's 1-800-GOOG-411.

No. 2: Centralize ordering and provisioning

Many large enterprises allow various offices and locations to perform their own telecom ordering. However, allowing too many employees to work directly with service providers will cost you in the end. Your greatest leverage is knowing your inventory and obtaining volume discounts. It is crucial to centralize ordering through a single department, with specifically-named individuals listed in the contracts who are responsible for purchasing control. That way, if unauthorized personnel submit orders that are accepted, the carrier will be held responsible for the charges.

For example, after a large hotel chain centralized ordering and provisioning into one department, the new TEM team uncovered that 18 active T1s were coming into one conference property-that's 17 too many. After further investigation, it was revealed that individual employees were ordering the lines each time a large convention was hosted at the property. No one from the hotel knew to check the existing inventory and the service provider was happy to receive the orders.

In addition to centralizing orders, look at consolidating the number of vendor invoices. Savings can often be found just by reducing the overall number of checks produced.

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